Tel Aviv Bank Shares Drop in October as Sector Index Falls 3.87%
Tel Aviv banking stocks tumbled in October, with the sector index falling 3.87% amid broader market weakness and political uncertainty, as Bank of Jerusalem led losses with a sharp 16% decline.
October proved to be a challenging month for bank stocks on the Tel Aviv Stock Exchange, with the banking index dropping 3.87% as all six publicly traded lenders closed the period in negative territory. Market weakness was widespread, driven by broader local trends and growing political uncertainty toward the end of the month.
The First International Bank of Israel outperformed its peers, limiting its monthly decline to just 1.32%. Bank Leumi followed with a drop of 2.69%, remaining the only major institution to keep losses under 3%. Mizrahi-Tefahot saw its shares retreat by 4.17%, while Israel Discount Bank fell 4.81% and Bank Hapoalim recorded a 4.97% decrease.
Bank of Jerusalem lagged significantly behind the major lenders, posting a sharp double-digit decline of 16% for the month. Analysts note that due to its smaller market capitalization and lower trading volumes, the institution tends to experience heightened volatility compared to the industry leaders.
Despite the October downturn, the broader picture for the year 2026 remains partially positive. Bank Leumi leads the major lenders with a gain of 5.78% since the beginning of the year, followed by Bank Hapoalim with 3.92%, Mizrahi-Tefahot with 2.54%, and Israel Discount Bank with 0.57%. Conversely, First International Bank has dipped 5.46%, and Bank of Jerusalem continues to struggle with a 24.07% drop.
Looking ahead, Israeli banks continue to benefit from a relatively favorable operating environment supported by elevated interest rates that bolster financing income. However, potential future rate cuts may narrow lending margins, prompting financial institutions to seek new growth drivers as investors closely monitor upcoming third-quarter earnings reports.
